Danos & Curole Marine Contractors, Inc. v. BP Am. Prod. Co.

• Decision Date: 19 November 2014
• Docket Number: Civil Action No. H–13–3803.
• Citation: 61 F.Supp.3d 679
• Parties: DANOS & CUROLE MARINE CONTRACTORS, INC., Plaintiff, v. BP AMERICA PRODUCTION COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Texas

61 F.Supp.3d 679

DANOS & CUROLE MARINE CONTRACTORS, INC., Plaintiff
v.
BP AMERICA PRODUCTION COMPANY, Defendant.

Civil Action No. H–13–3803.

United States District Court, S.D. Texas, Houston Division.

Signed Nov. 19, 2014.

61 F.Supp.3d 681

G. Beauregard Gelpi, Michael H. Bagot, Jr., Wagner Bagot et al. New Orleans, LA, for Plaintiff.

Gavin H. Guillot, Johnson Johnson, Salvador J. Pusateri, Pusateri Barrios Guillot & Greenbaum, New Orleans, LA, Thomas W. Taylor, Andrews and Kurth, Houston, TX, for Defendant.

Amended Memorandum Opinion & Order¹

GRAY H. MILLER, District Judge.

Pending before the court is plaintiff Danos & Curole Contractors LLC's (“Danos”) motion for partial summary judgment (Dkt. 20), and defendant BP America Production Company's (“BP”) cross motion for summary judgment (Dkt. 22). Upon consideration of the motion, responses, and applicable law, Danos' motion (Dkt. 20) is GRANTED and BP's motion (Dkt. 22) is DENIED.

I. Background

Danos provides operations and maintenance labor services for BP on a platform in the Gulf of Mexico called “Marlin.” Dkt. 20–1 at 2–3. The platform is located on the Outer Continental Shelf (“OCS”) in Viosca Knoll Block 915, an area located

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near the coasts of Louisiana and Alabama. To manage the working relationship, Danos and BP entered a master service contract (“MSC”). In the MSC, Danos and BP agreed to indemnify the other for the injuries of their own employees. Id. at 3; Ex. 3 at 9–13.

The present litigation is an offshoot of litigation pending in the Eastern District of Louisiana involving Danos and BP.² In that case, BP's employee Charles Crawford (“Crawford”) was allegedly injured aboard the Marlin by one of Danos's employees. Id. Crawford filed suit against both Danos and BP to recover damages. Id. Subsequently, Danos filed a cross claim (Dkt. 1) against BP, seeking to enforce the indemnity provision in the MSC against BP with respect to Crawford's claims against Danos. Id. at 4; Dkt. 1. BP moved to dismiss the cross claim. Dkt. 2. The court denied the motion to dismiss and transferred the claim to this court, pursuant to a forum selection clause in the MSC. Dkt. 10.

In this court, Danos filed a motion for partial summary judgment (Dkt. 20) seeking a determination that the defense and indemnity provisions of the MSC are enforceable against BP. Dkt. 20–1. As part of its motion, Danos seeks a determination that Alabama is the “adjacent state” to the Marlin under the Outer Continental Shelf Lands Act (“OCSLA”), therefore, Alabama law applies where there are gaps in federal law. Dkt. 20–1. BP responded (Dkt. 21) that under OCSLA, Louisiana is the “adjacent state.” Therefore, Louisiana law applies and renders the indemnity provisions unenforceable under the Louisiana Oilfield Indemnity Act. Dkt. 21 at 1. BP also filed a cross motion for summary judgment (Dkt. 22), which seeks a determination that Louisiana law applies, and incorporates its arguments from its response (Dkt. 21) to Danos' motion. Danos responded (Dkt. 24) to BP's cross motion by incorporating its arguments from its own motion for partial summary judgment (Dkt. 20). Both motions have been responded to and are ripe for discussion.

II. Law

A. Summary Judgement Standard

A timely motion for summary judgment shall be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(C) ; see also Carrizales v. State Farm Lloyds, 518 F.3d 343, 345 (5th Cir.2008). The moving party bears the initial burden of informing the court of all evidence demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party fails to meet this burden, then it is not entitled to a summary judgment, and no defense to the motion is required. Id. at 322, 106 S.Ct. 2548. Only when the moving party has discharged this initial burden does the burden shift to the non-moving party to demonstrate that there is a genuine issue of material fact. Id. If the nonmoving party does not respond, or address or support all facts alleged by the moving party, the court may consider the facts undisputed and grant summary judgment if the movant is entitled to it. Fed. R. Civ. P. 56(e).

When considering a motion for summary judgment, the court must view the evidence in the light most favorable to the non-movant and draw all justifiable inferences in favor of the non-movant.

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Envtl. Conservation Org. v. City of Dall., Tex., 529 F.3d 519, 524 (5th Cir.2008). In reviewing the evidence in the record, the court does not make credibility determinations or weigh any evidence. Moore v. Willis Ind. Sch. Dist., 233 F.3d 871, 874 (5th Cir.2000). The court disregards all evidence favorable to the moving party that the jury is not required to believe. Id. Finally, it gives credence to the evidence favoring the non-moving party as well as to the evidence supporting the moving party that is uncontradicted and unimpeached. Id. However, the non-movant cannot avoid summary judgment simply by presenting “conclusory allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation.” See TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir.2002) ; see also Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc).

Additionally, the first issue before the court involves a determination of what law applies. A determination of which state is “adjacent” to the Marlin under OCSLA, and therefore which state's law applies to the case, is a question of law. See Snyder Oil Corp. v. Samedan Oil Corp., 208 F.3d 521, 523 (5th Cir.2000) (reviewing whether district court's state adjacency analysis under OCSLA was correct as a matter of law). In this case, because a choice of law determination is a question of law, the traditional standard for summary judgment does not apply. Vargas v. Kiewit Louisiana Co., No. H–09–2521, 2012 WL 1029517, at *2 (S.D.Tex. Mar. 26, 2012) (Ellison, K.) (citing Nunez v. Hunter Fan Co., 920 F.Supp. 716, 717–18 (S.D.Tex.1996) ). Instead, the facts on which choice of law depends are properly determined by the Court after considering the affidavits, depositions, and other matters submitted by the parties. Id. (internal citations omitted).

B. OCSLA

OCSLA grants jurisdiction to the United States “over the soil and seabed of the oceans and artificial islands and fixed structures located thereon, and grants to the United States the mineral resources that are part of the OCS.” Snyder Oil Corp. v. Samedan Oil Corp., 208 F.3d 521, 522 (5th Cir.2000). Federal law governs actions brought under OCSLA, unless there is a gap in the federal law, wherein “the law of the adjacent state” will be used as “surrogate federal law.”³ Bartholomew v. CNG Prod. Co., 862 F.2d 555, 557 (5th Cir.1989). This Congressionally mandated choice of law provision trumps any contrary contractual provisions. Snyder, 208 F.3d 521 at 524. The Act goes on to state that “the President shall determine and publish in the Federal Register such projected lines extending seaward and defining

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each such area.”⁴ 43 U.S.C. § 1333(a)(2)(A) (hereinafter referred to as “ § 1333(a)(2)(A) ”).

In the absence of the Presidential determination, the Fifth Circuit has determined an “adjacent state” by considering four factors: 1) geographic proximity; 2) which coast federal agencies consider the subject platform to be “off of”; 3) prior court determinations; and 4) projected boundaries. Snyder, 208 F.3d at 524–25. This is not a strict four-factor test, but instead four categories of relevant evidence for courts to consider. Id. at 525. If “parties present evidence on only one factor, that factor is controlling.” Id. at 524. But when courts are presented with more than one type of evidence, a single factor is not controlling. Id.

C. Alabama's Law on Indemnity Provisions⁵

Alabama law generally construes contracts as they are written. Holcim (US), Inc. v. Ohio Cas. Ins., 38 So.3d 722, 728 (Ala.2009). Alabama has long enforced indemnity agreements, even those that indemnify for another's negligence. Id. at 728. However, to be enforceable, some parameters must be met. The parties must enter the agreement knowingly and for valid consideration. Id. at 727. An indemnity provision to indemnify another's wrongs, such as negligence, must be expressed clearly and unequivocally. Id. Further, the contract must be fair in that the indemnitee cannot possess disproportionate bargaining power. Id.

III. What State is Adjacent to The Platform?

At the outset, the parties agree on several things. Because the accident occurred in the OCS, the parties agree that the controversy is governed by OCSLA. Dkt. 20–1 at 5; Dkt. 21 at 1. The parties also agree that OCSLA adopts the law of the...